8/23/2007 @ 6:55AM

Millionth Vehicle Rolls Off Chery's Lines

As a four-door hatchback rolled off its assembly line, Chery became the first Chinese automaker to have produced 1 million cars. Following newly inked deals with Italy’s Fiat and Iran’s biggest automaker, Khodro, the Chinese flag bearer vowed to double the number of its offshore plants in three years.

The millionth car, finished on Wednesday, is the A3 model, which Chery launched at Beijing auto show last year. The company–based in Anhui province–which has been gearing up to compete against foreign joint ventures, took only 17 months to complete the production of its second half million cars; the first half million required six years.

Chery is now able to manufacture 400,000 units a year. Besides its production complex in Anhui, seven overseas plants have been set up in Iran, Russia, Ukraine, Indonesia, Egypt and Uruguay.

At a ceremony yesterday, Chery unveiled its target to double the number of foreign factories to 14 by 2010. Argentina and India are two of the options Chery is considering to escape foreign tariff barriers, according to China Daily.

Chery has recently teamed up with different foreign car firms to expand overseas. It announced last week an agreement with Khodro and the Canadian investment firm Solitac to open a factory with maximum annual production capacity of 200,000 in northern Iran. (See “Chery Takes A Chance On Iran“)

According to the terms of a previous deal, Chery-made Chryslers will hit the U.S. and North America markets in two years or so at around half of the current price of
Chrysler
‘s cheapest model. (See “Chrysler Inks Deal To Sell Chinese-Made Cars“)

Even though China has replaced Japan as the world’s second largest automotive consumer market after the United States, Chery, the youngest of the Chinese carmakers, set up in 1997, is facing a tough challenge to hold its position against the joint ventures set up by
GM
,
Volkswagen
and
Honda
in China.

Chery, which started shipping cars abroad in 2001, found its niche in exporting to Eastern European and Middle Eastern countries. With 41,700 cars sold overseas in the first five months of this year, about 80% of the country’s total vehicle exports, Chery has surpassed its peers to become the biggest Chinese car exporter.

The company has ambitious plans to boost its overseas sales to 400,000 units a year by 2010, from 52,000 units last year.